Estate-planning seminar explains new death tax laws

Death continues to be a taxing affair.

Congress, however, has softened the financial blow under a new law that raises the federal estate tax exemption from $1 million to $3.5 million by 2009 and even eliminates the tax for one year in 2010, two St. Louis tax attorneys say.

But because the new law is set to expire on Dec. 31, 2010, Americans would resume paying the death tax in 2011 on any estate valued at over $1 million, tax attorney Janet Maltagliati told an estate-planning seminar in Cape Girardeau on Tuesday.

About 50 area businessmen, tax lawyers, accountants, bankers and financial planners attended the seminar at Southeast Missouri State University.

The Center for Entrepreneurial Studies and Small Business Management at Southeast and the school's fund-raising University Foundation hosted the seminar, held in Dempster Hall's Glenn Auditorium.

Dr. Gerald McDougall, dean of the university's business college, said the goal of the seminar was to help family-owned small businesses preserve their wealth and pass it on to their heirs.

Maltagliati conducted the seminar along with fellow tax lawyer David Freyman.

Freyman said the effort to abolish the death tax was an issue in the 2000 presidential campaign. But a bill to eliminate the federal estate tax was rejected by a 55-42 vote earlier this year, Freyman said.

Elimination harder

Last year's deadly terrorist attacks have made it harder to eliminate the death tax, Freyman said.

"Estate taxes traditionally are used to pay for wars," he said.

With the United States now engaged in a war on terrorism, politicians are reluctant to eliminate any tax that might help pay for it, Freyman said.

But he said nothing is certain when it comes to efforts to amend the tax laws, particularly with both Democrats and Republicans vying for control of the Senate.

"Who knows what will happen after the election in November," he said.

For now, the law means that American families can retain more of their wealth if a death in the family occurs in 2010 than in any other year, Freyman and Maltagliati said.

Federal death taxes on an estate worth $5 million would total $675,000 in 2009, zero in 2010 and more than $2 million in 2011, the lawyers said.

mbliss@semissourian.com

335-6611, extension 123